City schools overcharged on water bills

Luke Broadwater and Erica L. Green, The Baltimore Sun

City public works officials say they are adjusting water bills for Baltimore public schools after several were overbilled this year by thousands of dollars — including one school whose bill rose nearly $200,000.

The school system, meanwhile, has not paid a water bill in six months while administrators contest what they believe are exorbitant charges, said Victor de la Paz, the school system's chief financial officer.

"We're not going to pay it until we understand it," de la Paz said.

The Department of Public Works is determined to fix water billing problems and has enacted reforms, Mayor Stephanie Rawlings-Blake said this week.

"We're working very hard to correct a long-standing problem," she said. "I want people to understand that this has been messed up for a long time. ... When something's been messed up so long, it takes a lot of hours and human capital to change it."

According to city records, at least six school water bills shot up noticeably this year — to a total of about $350,000 more than they had paid months earlier. For instance, Walter P. Carter Elementary and Middle's bill more than tripled from $6,300 to $20,600 in April and then jumped to more than $42,300 in July. A month later, Eutaw-Marshburn Elementary's bill skyrocketed from $976 to $198,000.

Kurt L. Kocher, spokesman for public works, said school officials have been in contact with the city about the overcharges. Meter readers have been dispatched to double-check the readings and lower bills where appropriate, Kocher said.

"We are already making the adjustments," he said. "They're looking at the bills. They're sending them back to us. The system works."

Average quarterly bills for schools generally do not exceed $10,000, De la Paz said. Yet some schools, such as Western High, are routinely charged more, city records show. The all-girls school has been charged between $63,000 and $77,000 three times this year. In 2009 and 2010, most of its bills were less than $20,000.

"We insist on seeing the credit in the next bill, or we won't pay," de la Paz said of the overcharges.

City Councilwoman Mary Pat Clarke, who has been outspoken about the city's water billing problems, said the school system was correct to withhold payment until the large spikes can be explained.

"It's outrageous that schools are being overcharged, because that's money that can't be spent teaching the children," Clarke said. "I'm glad the school system is holding back on payments until it can get the correct amounts. Unfortunately, my constituents can't do that."

Clarke cited a Baltimore Sun article in August that reported the city had failed to collect more than $10 million in overdue water bills owed by corporations, nonprofits and government offices. She lamented that residents of Ednor Gardens-Lakeside — and others in her district who have been overbilled — face liens on their homes if they don't pay up.

"If you owe the bank a thousand dollars, you're in trouble," Clarke said. "If you owe them a million, the bank is in trouble."

News of the dispute over school water bills comes days after Baltimore Circuit Court Clerk Frank M. Conaway formally notified the city of his plans to file a class action lawsuit over erroneous charges to residents by the municipal water billing system.

Conaway's attorney, Neal M. Janey — a former city solicitor — sent a formal "notice of claims" letter this week to current City Solicitor George A. Nilson, alerting him of plans for the suit. Janey said the suit arises from the city's failure to collect on water bills owed by businesses and nonprofit organizations even as some residents are being forced from their homes for overdue bills. Nilson accused the men of taking legal action as part of a publicity stunt.

It also comes as the water system grapples to resolve problems identified in a city audit released in February. City officials acknowledged that they overcharged 38,000 mostly residential customers by at least $4.2 million and issued refunds. The auditor called for another $5 million in refunds.

The administration has outlined a long-term effort to address billing problems attributed to faulty water meters, an outdated computer system, human error and, in some neighborhoods, meter readings allegedly fabricated by two employees who no longer work for the city.

The high bills for schools are complicated further by conflicting information on the city's official billing website. The site shows that the schools paid all of their contested accounts Oct. 2, but school officials deny having done so.

Baltimore finance director Harry E. Black attributed the inaccurate information to a programming error and said the departments of finance and public works are working with the IT department to fix the problem. "It manifested itself recently with this issue," Black said. "We know what it is, and it's going to be corrected."

Black also said that progress was being made on revisions to a 2010 annual citywide audit, which the city paid accounting firm Ernst & Young nearly $1 million to fix in part due to errors in water billing. It should be completed in November. Black said he believed overcharges and undercharges from water bills will largely balance out in the annual audit.

"There are a certain amount of underbillings and a certain amount of overbillings," he said. "I believe the difference is going to be a positive number but immaterial in terms of total city activity."

Curtis Bay activist Linda Stewart, who has studied the city's water bills in depth, said she believed schools have been overcharged for years.

She referred to an incident in 2011 when the bill at old Highlandtown Middle —boarded up while a developer completes plans to turn it into apartments — jumped from $24,700 to $438,700, only to fall to $1,100 months later.

In 2007, Stewart said she brought a batch of school bills that she believed were too high to school administrators. They all later received credits, she said.

"It's very seldom that they get a credit," Stewart said.

This week, Rawlings-Blake outlined a series of improvements her staff implemented in the water-billing system. The city increased its staff of meter readers by almost 30 percent and hired temporary employees to assist with the adjustment of 70,000 accounts, she said. The city also opened a "one-stop" customer care center, the mayor said, and increased customer service representatives from seven to 11.

"One by one by one, we're making progress," Rawlings-Blake said. "We want to get it right. We want people to not just have good-quality, safe water, but to know that what they're being charged is for the water they're using. Money's too tight. Under my administration, it's not going to go on. We're going to fix it."